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Wednesday, 24 April 19
SHIPPING MARKET INSIGHT - IS THIS A BANKERS' MARKET? - INTERMODAL
 Over the last 10 years, many of the traditional and top lending banks have made the decision to either downsize their portfolios or even exit shipping. According to Petrofin, Top 40 shipping banks’ lending has fallen since 2008 by 25%, whilst at the same time the world fleet has grown by 28%. On top of this, out of the banks that have decided to stay in the game, not all of them have the strength, the budget and the competitive terms to do so. As a result, the availability of financing for small-medium size companies has become a scarce, hence a luxury good. In other words, even when there is available financing for these companies, its cost is really prohibitive.
Apart from the banks’ endogenous and structural issues, their shipping departments also need to decide where to allocate their budget. In an era of growing LNG demand, numerous large shipping firms invest in the very capital intensive LNG carriers. Most of the large banks are there to support their very good clients. However, this means that a big percentage of their budget (and resources in general) end up to the LNG carriers’ financing, i.e. not much budget left for the remaining sectors/shipping projects. So, when these banks are left with a limited budget to spend, they become very selective and of course their pricing goes up as the list of the waiting finance projects is significant.
But what about the alternative ways of financing for the small and medium size companies? Asian leasing has indeed filled part of the gap that was created with the traditional banks’ exit, however, again this is available for owners with larger fleets and bigger ticket sizes. Public markets have been quiet regarding shipping in general; bond markets again require significant size. Therefore, the small companies are left with the option of the so called alternative financing. Private equity and hedge funds do have the funds to invest, but this only happens when they get the return of capital that they require; given that this most of the times is a double digit figure, then the capital cost for the small/medium ship owners increases dramatically.
There are quite a few new European banks that have joined ship financing – whose pricing sits in between the one of the traditional banks and that of leasing – however, their current budget is nowhere near to filling the gap that was left after the departure of the big banks.
Therefore, small-medium size shipping companies struggle to find competitive finance terms. Someone may argue that this had always been the case, however, in today’s ship finance market it is evident that the financing of small-medium size shipping companies is not the banks’ first priority, which should not be the case given the performance of such companies during recent years. Indeed, many small-medium size companies have proved their top quality and professionalism by not only surviving the crisis but also by getting back into expansion mode. There are many ship-owning companies falling into this category. Indicatively, only in Greek shipping there are more than 150 companies that own 3-15 bulk carriers, of more than 28,000 dwt and younger than 17 years old. A big percentage of these companies are long standing and solid companies; however, face the above finance issues.
This is the clientele that will provide the bank with projects of good credit quality and at the right pricing and therefore should be the one attracting the attention of ship financiers if they wish to make their business efficient and dynamic again.
By George Laios
Deputy CEO, Intermodal Group
Compiled by:
Intermodal Research & Valuations
Analysts:
Ms Eva Tzima
George Panagopoulos
Disclaimer and legal disclosure: For any further queries please do not hesitate to contact our Research & Valuations Department. The information contained in this report has been obtained from various sources, as reported in the market. Intermodal Shipbrokers Co. believes such information to be factual and reliable without making guarantees regarding its accuracy or completeness. Whilst every care has been taken in the production of the above review, no liability can be accepted for any loss or damage incurred in any way whatsoever by any person who may seek to rely on the information and views contained in this material. This report is being produced for the internal use of the intended recipients only and no reproducing is allowed, without the prior written authorization of Intermodal Shipbrokers Co.
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Friday, 08 March 19
KOMIPO INVITES BIDS FOR 2.6 MILLION TONS OF AUSTRALIAN 5700 NAR COAL FOR FIVE YEARS
South Korea state-owned utility Korea Midland Power (KOMIPO) issued a tender for 520,000 MT of min. 5700 NAR coal of Australian origin to be burnt ...
Friday, 08 March 19
CHINA'S COAL DEMAND FORECAST TO DROP SLOWLY - YONHAP
China’s coal demand is expected to fall at a snail’s pace over the next 20 years due to the country’s preference for the cheap fo ...
Thursday, 07 March 19
INDONESIAN COAL PRICE REFERENCE PLUNGE TO LOWEST IN SEVEN MONTHS
COALspot.com: The Ministry of Energy and Mineral Resources of the Republic of Indonesia has revised down the benchmark price of Indonesian thermal ...
Wednesday, 06 March 19
KOSPO INVITES BIDS FOR 80,000 MT OF 3800 NCV COAL FOR 21 - 30 MARCH, 2019 LOADING
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 80,000 MT of min 3,800 kcal/kg NCV low calor ...
Wednesday, 06 March 19
KOREA SOUTHERN POWER CO INVITES BIDS FOR 980,000 MT OF 4600 NCV COAL FOR THREE YEARS
COALspot.com: South Korea state-owned utility Korea Southern Power Co. Ltd (KOSPO) issued a tender for 320,000 MT of min 4,600 kcal/kg NCV low calo ...
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- Parry Sugars Refinery, India
- Metalloyd Limited - United Kingdom
- TNB Fuel Sdn Bhd - Malaysia
- Barasentosa Lestari - Indonesia
- Holcim Trading Pte Ltd - Singapore
- Meenaskhi Energy Private Limited - India
- Power Finance Corporation Ltd., India
- Economic Council, Georgia
- New Zealand Coal & Carbon
- Kalimantan Lumbung Energi - Indonesia
- Kumho Petrochemical, South Korea
- Standard Chartered Bank - UAE
- Interocean Group of Companies - India
- Samtan Co., Ltd - South Korea
- Therma Luzon, Inc, Philippines
- Global Business Power Corporation, Philippines
- Baramulti Group, Indonesia
- Cigading International Bulk Terminal - Indonesia
- Altura Mining Limited, Indonesia
- Cement Manufacturers Association - India
- Indonesian Coal Mining Association
- Iligan Light & Power Inc, Philippines
- Anglo American - United Kingdom
- Singapore Mercantile Exchange
- Madhucon Powers Ltd - India
- Mercator Lines Limited - India
- Planning Commission, India
- Ministry of Mines - Canada
- Global Coal Blending Company Limited - Australia
- Indian Oil Corporation Limited
- Global Green Power PLC Corporation, Philippines
- Deloitte Consulting - India
- Star Paper Mills Limited - India
- Xindia Steels Limited - India
- Toyota Tsusho Corporation, Japan
- Siam City Cement - Thailand
- Vedanta Resources Plc - India
- TeaM Sual Corporation - Philippines
- Edison Trading Spa - Italy
- Salva Resources Pvt Ltd - India
- Eastern Energy - Thailand
- Banpu Public Company Limited - Thailand
- MS Steel International - UAE
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Mercuria Energy - Indonesia
- Australian Commodity Traders Exchange
- Port Waratah Coal Services - Australia
- Energy Link Ltd, New Zealand
- Gujarat Mineral Development Corp Ltd - India
- Eastern Coal Council - USA
- Aboitiz Power Corporation - Philippines
- Makarim & Taira - Indonesia
- Pipit Mutiara Jaya. PT, Indonesia
- SMC Global Power, Philippines
- Price Waterhouse Coopers - Russia
- The University of Queensland
- Aditya Birla Group - India
- Carbofer General Trading SA - India
- Binh Thuan Hamico - Vietnam
- Maheswari Brothers Coal Limited - India
- GMR Energy Limited - India
- Tata Chemicals Ltd - India
- Miang Besar Coal Terminal - Indonesia
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- VISA Power Limited - India
- ICICI Bank Limited - India
- Bangladesh Power Developement Board
- Ministry of Finance - Indonesia
- Meralco Power Generation, Philippines
- Thiess Contractors Indonesia
- Borneo Indobara - Indonesia
- Karbindo Abesyapradhi - Indoneisa
- Africa Commodities Group - South Africa
- Sojitz Corporation - Japan
- PetroVietnam Power Coal Import and Supply Company
- Sinarmas Energy and Mining - Indonesia
- Directorate General of MIneral and Coal - Indonesia
- Wilmar Investment Holdings
- Videocon Industries ltd - India
- The State Trading Corporation of India Ltd
- Larsen & Toubro Limited - India
- London Commodity Brokers - England
- GVK Power & Infra Limited - India
- Vizag Seaport Private Limited - India
- Gujarat Sidhee Cement - India
- Renaissance Capital - South Africa
- Coal and Oil Company - UAE
- Kepco SPC Power Corporation, Philippines
- Bulk Trading Sa - Switzerland
- Malabar Cements Ltd - India
- Bhushan Steel Limited - India
- Leighton Contractors Pty Ltd - Australia
- Sakthi Sugars Limited - India
- Kapuas Tunggal Persada - Indonesia
- India Bulls Power Limited - India
- Petrochimia International Co. Ltd.- Taiwan
- Indogreen Group - Indonesia
- Kobexindo Tractors - Indoneisa
- IEA Clean Coal Centre - UK
- Uttam Galva Steels Limited - India
- Coastal Gujarat Power Limited - India
- Orica Mining Services - Indonesia
- Kartika Selabumi Mining - Indonesia
- Posco Energy - South Korea
- Chamber of Mines of South Africa
- Ministry of Transport, Egypt
- Australian Coal Association
- Pendopo Energi Batubara - Indonesia
- Kaltim Prima Coal - Indonesia
- Siam City Cement PLC, Thailand
- Chettinad Cement Corporation Ltd - India
- Jorong Barutama Greston.PT - Indonesia
- Directorate Of Revenue Intelligence - India
- Mintek Dendrill Indonesia
- Billiton Holdings Pty Ltd - Australia
- Wood Mackenzie - Singapore
- Bank of Tokyo Mitsubishi UFJ Ltd
- Jindal Steel & Power Ltd - India
- Bayan Resources Tbk. - Indonesia
- Goldman Sachs - Singapore
- CNBM International Corporation - China
- Petron Corporation, Philippines
- Manunggal Multi Energi - Indonesia
- Central Java Power - Indonesia
- Commonwealth Bank - Australia
- Merrill Lynch Commodities Europe
- SMG Consultants - Indonesia
- Minerals Council of Australia
- PNOC Exploration Corporation - Philippines
- Grasim Industreis Ltd - India
- Marubeni Corporation - India
- The Treasury - Australian Government
- Timah Investasi Mineral - Indoneisa
- Riau Bara Harum - Indonesia
- Mjunction Services Limited - India
- South Luzon Thermal Energy Corporation
- Straits Asia Resources Limited - Singapore
- Semirara Mining and Power Corporation, Philippines
- PTC India Limited - India
- Coalindo Energy - Indonesia
- Lanco Infratech Ltd - India
- Ceylon Electricity Board - Sri Lanka
- Latin American Coal - Colombia
- Romanian Commodities Exchange
- Attock Cement Pakistan Limited
- Maharashtra Electricity Regulatory Commission - India
- Electricity Authority, New Zealand
- Central Electricity Authority - India
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- PowerSource Philippines DevCo
- Krishnapatnam Port Company Ltd. - India
- Asmin Koalindo Tuhup - Indonesia
- Bhoruka Overseas - Indonesia
- Bhatia International Limited - India
- Gujarat Electricity Regulatory Commission - India
- OPG Power Generation Pvt Ltd - India
- Karaikal Port Pvt Ltd - India
- GN Power Mariveles Coal Plant, Philippines
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Globalindo Alam Lestari - Indonesia
- IHS Mccloskey Coal Group - USA
- White Energy Company Limited
- International Coal Ventures Pvt Ltd - India
- Bukit Asam (Persero) Tbk - Indonesia
- Medco Energi Mining Internasional
- CIMB Investment Bank - Malaysia
- Rashtriya Ispat Nigam Limited - India
- Trasteel International SA, Italy
- San Jose City I Power Corp, Philippines
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Jaiprakash Power Ventures ltd
- Offshore Bulk Terminal Pte Ltd, Singapore
- Simpson Spence & Young - Indonesia
- Kohat Cement Company Ltd. - Pakistan
- ASAPP Information Group - India
- Sindya Power Generating Company Private Ltd
- Alfred C Toepfer International GmbH - Germany
- SN Aboitiz Power Inc, Philippines
- Antam Resourcindo - Indonesia
- Intertek Mineral Services - Indonesia
- Sical Logistics Limited - India
- GAC Shipping (India) Pvt Ltd
- Vijayanagar Sugar Pvt Ltd - India
- Indian Energy Exchange, India
- Sarangani Energy Corporation, Philippines
- Thai Mozambique Logistica
- AsiaOL BioFuels Corp., Philippines
- Rio Tinto Coal - Australia
- McConnell Dowell - Australia
- Neyveli Lignite Corporation Ltd, - India
- Savvy Resources Ltd - HongKong
- Tamil Nadu electricity Board
- Ambuja Cements Ltd - India
- LBH Netherlands Bv - Netherlands
- Indika Energy - Indonesia
- Oldendorff Carriers - Singapore
- Orica Australia Pty. Ltd.
- Ind-Barath Power Infra Limited - India
- Indo Tambangraya Megah - Indonesia
- Bukit Makmur.PT - Indonesia
- European Bulk Services B.V. - Netherlands
- Bukit Baiduri Energy - Indonesia
- Heidelberg Cement - Germany
- Electricity Generating Authority of Thailand
- Semirara Mining Corp, Philippines
- Bahari Cakrawala Sebuku - Indonesia
- Georgia Ports Authority, United States
- Essar Steel Hazira Ltd - India
- Bharathi Cement Corporation - India
- Independent Power Producers Association of India
- Agrawal Coal Company - India
- Kideco Jaya Agung - Indonesia
- Parliament of New Zealand
- Energy Development Corp, Philippines
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